Boost or Bane for Multi-Channel Retailers?

It may seem like a grand idea to set up shop in a brand new mall that attracts and delights shoppers with free WiFi and user-friendly mobile apps that make it easy to find the products they want. Then again, even if this exciting technology lured more shoppers into the building, it wouldn't necessarily mean that those shoppers will buy more from your store.

This topic gained some extra attention from retail CIOs last week when the technology news media noticed a little tidbit tucked into a Land Securities press release. Land Securities, the largest real estate investment trust in the United Kingdom, owns and manages 24 shopping centers in that country and works with approximately 1,600 retailers. From the press release:

To complement our implementation of free wi-fi in our shopping centres and as part of our strategy to ensure we create an environment appropriate for multi-channel retailers, we have secured a tie-up with Google Product Search to offer the web-based service across our shopping centre portfolio.

A representative of Land Securities told me that the partnership with Google Product Search would allow shoppers to do all their comparison shopping while relaxing in the food court sipping tea. Instead of hustling from one end of the shopping center to the other hunting down the best deal, shoppers could use their mobile device to search the inventories of all the stores in the shopping center and find out not just what shops carried a product, but also the price of the item and whether the shop had it in stock. Retailers' participation in Google Product Search is voluntary, the representative said, and on the whole, the retailers in these shopping centers have been very supportive of this capability.

But I'm not convinced. My guess is that some retailers are putting on a brave face while secretly freaking out.

Some brick-and-mortar stores already get jittery every time they see a customer whip out a cellphone. They worry the shopper is browsing the Web to see if an item is cheaper at an online store. Yet the shop owners might find comfort in the knowledge that a brick-and-mortar shop can give you two things that an online shop can't: instant gratification and zero shipping costs. A shopper might very well opt for the item in the brick-and-mortar store, even if they have to spend a few extra bucks for it. If, however, a mobile app can tell the shopper that a store on the opposite end of the mall has the same item (in stock) for less, that poses a much bigger threat.

True, people may pay more for better service. But better service doesn't give your store as much of an edge once a shopping center-wide Google Product Search system is deployed. Think about it. I may take advantage of Wonderful Store's great service -- pretty displays, great selection, helpful staff, and tidy dressing rooms -- to choose the item I want. But once Wonderful Store has done all of the hard work for me, I can trot down the hall to Cheap Store and buy that item for less money without having to deal with its rude staff or messy dressing rooms. If retailers can't match the price of their competitors a few doors down in the mall, they'll need to come up with new ways to enhance customer loyalty.

Of course, there are limitations to Google Product Search. Its data is only as accurate as the data that your store gives it. Your store's exact inventory changes with every single sale. It's hard enough to maintain accurate real-time inventory on your own internal systems. If you also have to update the Google results manually or integrate your internal system with Google's, that just increases the difficulty.

And let's say I find the perfect dress in the perfect size at Wonderful Store and then check Google Product Search, which tells me Cheap Store has that perfect dress in that perfect size in stock for a lower price. If I then trot down to Cheap Store, find out that the Google information was wrong (Cheap Store doesn't have that dress in stock), run back to Wonderful Store, and learn that someone scooped up my perfect dress while I was out on a wild goose chase, I won't be happy. (It would serve me right, I suppose, for being disloyal to the first shop.)

My point is, if you don't do an excellent job of maintaining a near-real-time inventory, participating in Google Product Search could hurt your store's reputation. This is true regardless of whether you offer the lowest prices or the highest prices.

Retail CIOs, what do you think? Do you see the availability of Google Product Search in a shopping center as a great opportunity or an unnerving challenge? What other technology would you like shopping centers to provide (or not provide) that would help your business succeed in multiple channels? Let us know in the comments below.

@DBK: Wow. Will your wife take me shopping next time I need new clothes? I give her huge credit for that. It really does require an investment of time and attention to achieve that level of savings. At the same time, you're right, this is the world retailers have wrought upon themselves. Just as we can now use a plethora of resources to gauge the markup when we buy automobiles, we now have the same resources available to us online for smaller purchases. The accessibility of information such as typical dealer markups and Carfax have changed the car shopping experience. It's only to be expected it will have a profound impact on everyday shopping habits too.

Even in the case of Silicon Valley there are many such Barter Networks in existence today-You don't need to grow everything;just grow enough of something which is of use to someone else(apart from yourself).

Its a way to build up an alternative revenue stream not dependent on your work.

Just look around at your home very carefully.

Do you have space there to Grow something which can be of use to society today?

@eethworkz - I appreciate your optimistic point of view about being self sustained and the barter system. These are good points and a step in the right direction. Understanding that I grew up on a farm I get farming. To keep in prospective for me I live in the Silicon Valley and you configure an acre of land costs about 1 million dollars, if you can buy it. Then I would need the infrastructure to support that farm, of course a tractor and to put the work in to get the food out. Frankly the economy of scale is not there. The barter system has some merit, but again it takes time and at some level I have done this, but very little. I like the concept, but not sure it is practical for all people depending on where you live and economic requirements. PS I have three teenage boys, two in private high school and eat like you would not believe. So again, I like the idea but for me, not sure would work but it is a start and something to strive for. Plus shopping at places that sell lightly used clothing or appliances, recycle and referbish is good too. If for no other reason than to reduce dependency on others and to strive for self reliance and quality of life.

To clarify, I have near-boycotted Amazon; I admit that I used them a few years ago when a particular gift I wanted to get for someone in time for Christmas was only readily available via an Amazon seller.

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